How low can it go?
Joblessness in South Carolina reached another all-time low last month, dropping to 2.6 percent, according to new data released Tuesday by the S.C. Department of Employment and Workforce.
"That’s almost unfathomable for South Carolina," said Laura Ullrich, a regional economist with the Federal Reserve Bank of Richmond.
October's rate fell compared to September's record low of 2.9 percent. The state's jobless rate has dropped almost a full percentage point since June, and the current figure is 1 percent lower than the national rate of 3.6 percent.
On a list released Friday by the Bureau of Labor Statistics, which ranked U.S. metro areas based on jobless rates, South Carolina metros took nearly all of the top spots. Charleston is tied for the lowest rate along with Ames, a city in central Iowa.
Both Charleston and Ames had an unemployment rate of 1.5 percent in September, and three South Carolina metro areas were tied for the second-lowest rate of 1.6 percent: Greenville, Hilton Head and Spartanburg.
Just behind them, Columbia, S.C., and Columbia, Mo., both saw rates of 1.7 percent.
It's difficult to say whether the rate could drop any lower, Ullrich said, particularly since South Carolina has not had a history of posting such low figures. Typically, natural resource-rich states like the Dakotas or Wyoming have held that distinction.
During the recession, North Dakota's jobless rate never topped 4.3 percent while South Carolina's peaked in the double digits, at nearly 12 percent. And though the current rate is among the lowest in the country — right now, it's tied with three other states for the third-lowest rate in the U.S. — September was the first time in the state's history that unemployment was below 3 percent.
South Carolina's labor force is growing more rapidly than in most areas, Ullrich said.
That growth comes both from people moving into the state and residents entering the workforce such as young adults, people coming out of retirement or others securing jobs after a hiatus from work.
While manufacturing employment has been somewhat soft nationwide, with just 0.4 percent growth compared to last October, South Carolina has added 6,700 manufacturing jobs. That's a year-over-year growth rate of 2.7 percent.
The hospitality industry continues to lead the state in job growth with a net gain of 8,000 jobs since last October. That was followed by the trade, transportation and utilities sector with 7,900 jobs. Some of that growth can be attributed to the health of the ports in Charleston and Savannah, Ullrich said.
The Palmetto State has also added 6,600 new government jobs since last October, and, though the sector has seen multiple month-to-month dips throughout 2019, the construction industry is up 1,000 jobs.
The S.C. Department of Employment and Workforce's executive director Dan Ellzey described the October report as "astounding" in a statement Tuesday. Though the historically low rate bodes well for employees, Ellzey said that the "news is split" for employers.
As the jobless rate has dipped lower, the labor market has tightened, making it increasingly difficult for companies to compete for talent.
In an October business conditions report for the Carolinas compiled by the Federal Reserve Bank of Richmond, the index for the availability of skills needed was one of the lowest this year at -16.
The indexes are equal to the percentage of firms that reported increases in a category minus the firms that reported decreases. Most categories, like wages, have shown positive growth, but talent availability has been in the negatives all year.
Ullrich also noted that unemployment insurance claims in South Carolina have reached an extreme low, which indicates that few employees have been let go in recent weeks for economic reasons.
In October, just 9,500 such claims were filed, the lowest monthly figure since 1974. Taking into account the population growth since then — about 75 percent fewer people lived in the state at that time — that number is "very low," she said.
Employers are seeing savings from dropping unemployment tax rates which are expected to decrease by an average of 34 percent next year, the Department of Employment and Workforce announced earlier this month. The decreases are expected to yield savings for businesses of about $121 million.